‘Trump Trade’ Potential Impact on Crypto Ahead of US Elections
- As the 2024 US elections are near, the revival of the Trump Trade' could have a significant impact on the crypto market.
- Trump's cryptocurrency advocacy likely led to$BTC spiking by 6.67% since this year's first presidential debate.
- Vitalik Buterin (Ethereum's founder) warns against pro-crypto votingand highlights the need to focus on the core principles of decentralization instead.
With the upcoming US presidential election on November 5, the Trump Trade' (investments and divestments capitalizing on Trump's potential win) is back.
For example, since Donald Trump's failed assassination attempt, institutions and individual investors have bought more Bitcoin, with the crypto market cap increasing by 5.33%, and $BTC hitting $64K since July 13 (+9.84%).
Let's explore what the Trump Trade means for financial markets (like crypto) in US politics and who's fighting back against pro-crypto policies.
The Influence of Presidential Politics on Financial SectorsThe Trump Trade highlights the impact of presidential politics on financial markets and policies. Moreover, the upcoming presidential election could impact the following key areas:
- Currencies: After Trump proposed slashing taxes, applying 60% tariffs on Chinese imports and 10% on all US imports during the first presidential debate in June, Jan Hatzius (Goldman Sachs chief economist) warned of higher inflation.
- US Treasuries: Money managers in the treasuries market (valued at $27T) have changed their strategies following Trump's tariff proposal, hedging against higher inflation by buying shorter-maturity notes and selling longer-term ones.
- Stocks: Healthcare companies, energy firms, banks, prison operators, and gun manufacturers will likely benefit from Trump's policies because of the loosening regulations in these sectors.
- Crypto: Trump's pro-crypto stance (contrasting with Biden's cautious attitude), has boosted Bitcoin's price past 63K, while the crypto market cap spiked by 5.33%.
Donald Trump's self-proclamation of becoming crypto president' may have fueled the crypto market during the first 2024 presidential debate.
Trump supports personal crypto management and investments, and even accepted crypto donations during his presidential campaign.Since the first 2024 presidential debate on June 28, $BTC's price has spiked by 6.67%, from $60K to $64K.
Trump's scheduled speech at the Bitcoin Conference on July 27 could mark a pivotal moment for crypto,' potentially bringing Bitcoin beyond its $73K ATH.
While Trump and Biden's opposing crypto stances could sway the outcome of the upcoming presidential election, Vitalik Buterin argues against supporting only pro-crypto politicians.
Vitalik Buterin Cautions Against Pro-Crypto PoliticiansButerin raises concerns about supporting politicians based on their crypto stance because making decisions in this way carries a high risk of going against the values that brought you into the crypto space in the first place.'
He emphasizes that crypto users should vote based on the core principles of decentralization, such as technological freedom and data protection.
The ability to issue tokens can be a significant power-up to people's ability to make digital organizations that actually have collective economic power and do things. But a near-exclusive focus on cryptocurrency and blockchains is more difficult to defend, and importantly it was not the ideology that originally created crypto in the first place.Vitalik ButerinHowever, Buterin's caution has not come without backlash, with one X user calling him a useless political commentator in crypto.'
What Does This Mean for the US Economy & Crypto?I respect Vitalik but he has always been among the most naive and useless political commentators in crypto. Idealism is not realism, and he pretends we aren't dealing with a cultural cancer and infestation of Marxism.
He's wrong.@VitalikButerin I'm always happy to chat. https://t.co/mMFKnv6uBI
- Ryan Selkis (d/acc)
(@twobitidiot) July 17, 2024
Trump's crypto stance could attract significant support from the crypto community. Many see these digital assets as essential for personal financeand economic innovation, which could play in Trump's favor.
However, Vitalik Buterin's caution against crypto-centric voting underscores the complexity of the issue, as he shows there are more important factors to consider.
The election's outcome could have far-reaching consequences on both the US economy and the crypto market worldwide.
ReferencesClick to expand and view references
- More China tariffs if re-elected, Donald Trump says (BBC)
- Goldman Sachs warns that if Trump takes office, the Fed may raise interest rates an extra 5 times (futubull)
- The Trump Trade' Is Back: What It Means for Investors (Bloomberg)
- Trump v Biden in the first 2024 presidential debate: our panelists' verdict (The Guardian)
- Bitcoin Price Today (CoinMarketCap)
- Trump's Speech at Bitcoin Conference Will Mark a Pivotal Moment for Crypto (Yahoo! Finance)
- Against choosing your political allegiances based on who is pro-crypto" (Vitalik.eth)
- Global Live Cryptocurrency Charts & Market Data (CoinMarketCap)
- Bitcoin Price Chart (CoinMarketCap)
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